DAOs are Orgs: Moving at the speed of trust (in a trustless environment) - with Tracheopteryx
BOUNDARYLESS CONVERSATIONS PODCAST - SEASON 3 EP #17
DAOs are Orgs: Moving at the speed of trust (in a trustless environment) - with Tracheopteryx
tracheopteryx.eth | $YFI comes on the show to talk about ‘everything DAOs’, from the early days to today’s latest developments. We clarify what is really meant by trustlessness, and how modularity and composability are evolving in the DAO space.
Podcast Notes
Today we’re joined by Tracheopteryx — or Trach — Pioneer of decentralized governance, operations, and compensation systems. Trach is co-founder of Coordinape and previous contributor to yearn finance.
In this conversation, we delve into what DAOs are and why the future lies in this framework. We also talk about the connection between ownership and decision making, striving for a ‘trustless’ infrastructure, why we might not see companies like Apple or Google ‘go DAO’ soon, the role of six-person teams — and why everyone working on DAOs are in essence collaborating on a creating a greater pie.
Key highlights
We discussed:
- What DAOs are and key differences with corporate governance
- Trustless mechanisms and the Blockchain
- How likely existing traditional players are to embrace DAOs
- What we mean by the word ‘trustless’
- How non-developers can get involved with DAOs projects
To find out more about Trach’s work:
- Twitter: https://twitter.com/tracheopteryx
- Website: https://coordinape.com/
Other references and mentions:
- Compensation in DAOs with Tracheopteryx on the Collectively Intelligent Podcast: https://podcasts.apple.com/us/podcast/compensation-in-daos-with-tracheopteryx/id1577798978?i=1000538952056
- Helium: https://www.helium.com/technology
- Colony: distributed organizations that actually work — with Aron Fischer and Jack du Rose: https://boundaryless.io/podcast/colony/
- Moving beyond coin voting governance by Vitalik Buterin: https://vitalik.ca/general/2021/08/16/voting3.html
- Blue Sky Project: https://blueskyweb.xyz/
- Thirsty Thirsty: https://www.thirstythirsty.org/
- Ronald Coase, The Nature of the Firm, 1937: https://onlinelibrary.wiley.com/doi/10.1111/j.1468-0335.1937.tb00002.x
Find out more about the show and the research at Boundaryless at https://boundaryless.io/resources/podcast/
Thanks for the ad-hoc music to Liosound / Walter Mobilio. Find his portfolio here: https://boundaryless.io/podcast-music
Recorded on 3 June 2022.
🌐 Boundaryless Conversations Podcast is about exploring the future of organizing at scale by leveraging on technology, network effects, and shaping narratives. We explore how platforms can help us play with a world in turmoil, change, and transformation: a world that is at the same time more interconnected and interdependent than ever but also more conflictual and rivalrous.
Today we’re joined by Tracheopteryx — or Trach — Pioneer of decentralized governance, operations, and compensation systems. Trach is co-founder of Coordinape and previous contributor to yearn finance.
In this conversation, we delve into what DAOs are and why the future lies in this framework. We also talk about the connection between ownership and decision making, striving for a ‘trustless’ infrastructure, why we might not see companies like Apple or Google ‘go DAO’ soon, the role of six-person teams — and why everyone working on DAOs are in essence collaborating on a creating a greater pie.
Key highlights
We discussed:
- What DAOs are and key differences with corporate governance
- Trustless mechanisms and the Blockchain
- How likely existing traditional players are to embrace DAOs
- What we mean by the word ‘trustless’
- How non-developers can get involved with DAOs projects
To find out more about Trach’s work:
- Twitter: https://twitter.com/tracheopteryx
- Website: https://coordinape.com/
Other references and mentions:
- Compensation in DAOs with Tracheopteryx on the Collectively Intelligent Podcast: https://podcasts.apple.com/us/podcast/compensation-in-daos-with-tracheopteryx/id1577798978?i=1000538952056
- Helium: https://www.helium.com/technology
- Colony: distributed organizations that actually work — with Aron Fischer and Jack du Rose: https://boundaryless.io/podcast/colony/
- Moving beyond coin voting governance by Vitalik Buterin: https://vitalik.ca/general/2021/08/16/voting3.html
- Blue Sky Project: https://blueskyweb.xyz/
- Thirsty Thirsty: https://www.thirstythirsty.org/
- Ronald Coase, The Nature of the Firm, 1937: https://onlinelibrary.wiley.com/doi/10.1111/j.1468-0335.1937.tb00002.x
Find out more about the show and the research at Boundaryless at https://boundaryless.io/resources/podcast/
Thanks for the ad-hoc music to Liosound / Walter Mobilio. Find his portfolio here: https://boundaryless.io/podcast-music
Recorded on 3 June 2022.
🌐 Boundaryless Conversations Podcast is about exploring the future of organizing at scale by leveraging on technology, network effects, and shaping narratives. We explore how platforms can help us play with a world in turmoil, change, and transformation: a world that is at the same time more interconnected and interdependent than ever but also more conflictual and rivalrous.
Transcript
Simone Cicero:
Hello, everybody. Welcome back to the Boundaryless Conversations Podcast. I’m here today with my usual co-host, Stina Heikkila.
Stina Heikkila:
Hello, everyone.
Simone Cicero:
And today we have Trach with us. Hello, Trach.
Tracheopteryx:
Hey, thanks for having me.
Simone Cicero:
Thank you very much for joining us. And we’re really looking forward to leverage some of your great knowledge about this crazy important and interesting space that is growing, I would say day by day, around what we call DAOs, right? So, these kinds of new types of organizations that are emerging around the new enablers that blockchain and BFT consensus and tokenization are bringing us in terms of designing products and organizations. We have a lot of interest in this conversation. And more specifically, we wanted to maybe start with an initial framing that maybe you can give us a little bit with regards to two types of things, two elements.
One is how kind of spaces let’s say, in the value chain, and in the organizational landscape, DAOs can basically take over, or in general, inject or transform more easily or more importantly. And also maybe connected these a little bit with the pre-existing models and type of organizations, right. So, trying really to understand what are DAOs for, what we should be using them for, what kind of radical changes they bring to the table for us to do better, some of the things that we maybe used to do with corporates or with other types of organizations, experiencing the limits of those and maybe DAOs can really transcend those limits.
Tracheopteryx:
We can kind of go back to where DAOs as an idea came from. And it’s a simpler case to think about, which is really a way to create a decentralized organization that can make decisions about money in a truly decentralized way. And that’s the starting place where you have assets on a blockchain, and then you have a group of people that can make decisions about them without a trusted third party. You know, from there, the potential for DAOs is quite large, anyway, that you want to have really decentralized decision making without — in a trustless way.
Simone Cicero:
So, in a recent podcast that I was listening to, I think it was your appearance on Collectively Intelligent from Colony, you spoke about something that really called my attention in. And now in this introduction, you basically say DAOs are the tools that we can use where we distribute budgets, for example, and empower teams to operate in a trustless environment. But I think you double clicked during this podcast in this, let’s say, need to integrate the idea of trust in trustless environments. So, let’s say this sweet spot where the possibilities that the blockchain and the other tools that are emerging from Web3, are bringing in terms of creating these permissionless spaces where also trustless interactions are possible. And mixing them instead with the typical dynamics that exist in traditional organizations and teams where, in reality, trust is a real thing and people trust each other. Right?
So, maybe you can quickly double click on this mix between what is the real potential in integrating both trustless and permissionless context with the more trusted environments that normally emerge between a contributor, also people that share the same vision or even the same team?
Tracheopteryx:
Yeah, it’s a good point, because most people get really caught up in just the trustless piece. And as we know, from relating to other human beings on this planet, there is trust also. That’s not something that ever goes away hopefully, a world without any trust is a pretty boring and flat place. But thinking about how that comes in, the entire concept of DAOs can be pretty murky for most people, including those of us focused on them all the time. It’s still very emergent, it’s very new. Let’s drill in for a second on the kind of canonical kind of DAO and then we can go from there.
So, like Uniswap, for instance, you have a smart contract that is out there on the internet running on Ethereum. That can’t be shut down unless you shut down all of Ethereum. And it has a few different functions, you can call on it in terms of like changing parameters. It does its normal product stuff, like allowing you to make swaps of different assets. But then there’s also a governance component. That type of governance stuff, in the case of Uniswap, it’s a very simple one. It’s like turn the fees on or don’t, like one decision. And in uniswap governance, you have that. And then you also have the ability to give the Uni token to other people. And so these very small sets of decisions, how do you make them? And in the past before blockchain, you would have corporate governance make these types of decisions.
But because of blockchain now, we can allow those decisions to be made in a decentralized way. Although that’s not a monolithic term, because total decentralization is the heat death of the universe where all the particles in space collapse into black holes in those black holes separate out infinitely. And that’s not what anybody wants, right? At least not yet. But you want some type of decision making, which isn’t constrained by the need to rely on traditional governments and jurisprudence and things like that, you know. So, in the case of Uniswap, you have a token, and anybody can buy that token, then anybody that holds that token can weigh in and governance. There’s nuance there, because as it plays out, actually, there are certain large holders and this happens across DAO, which have a disproportionate say.
But this simple case, right, you have a set of tokens, a limited amount of tokens. There’s token weighted voting on different proposals to make very specific types of changes to an immutable contract that exists on the Ethereum blockchain. That’s the kind of simplest form of DAO governance, it’s very, very clear. But then from there how does Uniswap, the entire holistic idea of Uniswap, the entire thing work? There’s also Uniswap Labs, which is a company that functions in a normal company way. And people in there work together, and they trust each other. And they have bosses and things like that and they make decisions. That’s one way to work. So, this DAO idea can go beyond just deciding on five different things that an immutable contract can do.
It could, we believe many of us believe and are trying to use the same idea to make all the different types of decisions that need to happen in any type of organization, including hiring payroll, branding decisions, etc, etc. When it comes to those types of decisions, the standard token weighted voting or coin voting system, where all of the network participants that own a token weigh in on every decision doesn’t work very well, as you might imagine. We all — you have probably heard, like designed by committees, just about the worst thing you can do. Like, you don’t want to design a logo with 10,000 strangers on the internet. You want to delegate that power to a smaller group, in some way or another. And then when you drill down further, and you look at the actual way that human beings work, it isn’t a trusted way, if you’ve ever been on a high-functioning creative team, there’s a tremendous amount of trust. And there’s been a ton of research that’s been done, famously Google’s work on psychological safety, etc. In these types of environments, you need a lot of trust. So, DAOs tooling, or basically, the theory around DAOs, is still just beginning to explore how to create those types of trusted environments, as well being part of this larger trustless envelope.
Simone Cicero:
You know, looking at these more than type of organization then as a model of governance or a model of decision making or a model of execution of certain parts of the market. So, I can imagine, for example, two or three companies or even more as we look into that as a permissionless space, to kind of agree that part of the value chain they’re building value upon, should be governed in certain ways. So, basically isolating certain protocols that they can agree on, and collectively, basically contributing both in terms of funding it or taking decisions to these kinds of shared enabling layers. So, what I’m saying is, so maybe existing companies and existing types of organizations need to master this technique because it’s a new possibility that we have, and this could help us build more cooperative markets, more efficient markets, better coordination layers, right.
In this context, I’m also curious to know, how do you see this playing out in spaces that maybe traditionally not connected with DeFi you know, in this space, where all these DAO movement arise? So, for example, in terms of, I don’t know, can we imagine a DAO governing physical infrastructure like in logistics, for example, in network? I mean, we are seeing some experiments coming up with helium, for example, or some other — which by the way for our listeners, is creating telco network infrastructure. So, what do you feel in terms of interplay between existing organizations and these DAO patterns, first, from the point of view of where these patterns should be playing out? And how likely is that existing players embrace them to develop their coordination layer, their communication layers? Also, especially in industries that are not just digital, not just abstract and but also intangible spaces?
Tracheopteryx:
Well there’s a lot there. I mean, you could take a toy case of a company that just decides how many bricks to buy every day. So, it’s a physical thing, and they’re buying bricks on a physical market. And that decision making is a fairly small space of decision making. And that can be made through traditional corporate governance, or that’s the type of thing that you can have a DAO model make decisions about; how many to increase or decrease the rate of brick buying? I don’t see any particular challenge there around the decision making. But then one of the nuances here is that, okay, once you make that decision, what is the trust environment of that decision? And this is something that has a lot of variety within the DAO space as well.
But if we’re talking about interfacing with a traditional corporate environment, or traditional governmental environment, you can’t do that in a trustless way. You have to rely on some trusted third party, like an owner of a brick company, or some market that’s all ruled by traditional jurisprudence, but the decision making itself can happen. So, there’s an important way to think about this. There’s the difference between ownership and decision making. And if you don’t fully own something, you can’t fully make the decision on it. And there is no way to own things in a truly decentralized way, in the pre-blockchain world. And even in the blockchain world, decentralized control is an evolving concept. So, now that we’ve kind of made that distinction, there’s organizations that have lots and lots and lots of types of decisions to make. Like, imagine a company like Apple, trying to take a company like Apple and make a DAO decentralized system to make all of its decisions would be chaos. I mean, it wouldn’t work, because we just don’t have the tools yet.
Look, there’s a lot of variety of opinions now around DAOs, and how well they work. And you’ll have some notable people saying that they don’t like DAO governance, it doesn’t work. And you know, give me a top down corporate entity any day. And they’re right, in one way. For right now, if your bottom line is money, and you’re trying to make one specific type of product that’s complicated and requires a lot of different types of decision making, it’s hard to do that in a DAO. It’s really hard to do that in a DAO because it’s so early, really, and we have to reinvent so many of these tools. But the promise is huge because one of the major problems with corporations and with the way that we normally do large scale endeavor on the world right now, is that the highest technology, like the most evolved form of that organism is one where you have a small group of people making decisions for a much larger group of people.
And just by the nature of that network, it’s limited in its cognitive ability. Because doesn’t matter how smart I am, if I’m making decisions for 10,000 people that are somewhere else, I’m not going to make the best decisions. There’s no way around it because the nature of the world is that it changes quickly and there’s a lot of variables. And a lot of the stuff that we’ve learned from Teal and self-management is that the people that are involved in doing the work generally know best how to make decisions around it. But the traditional command and control style of governance doesn’t really factor that in very well. DAOs have the promise of really doing that, of doing that in a completely new way where you can create an organization that’s complicated with all these different features, different decisions, real world assets, whatever, that’s more integrated with the environment, more able to respond to things that change because of this kind of trustless infrastructure, but we don’t have all the layers yet to make that a reality.
Simone Cicero:
You spoke about Apple and I think it’s a very interesting example, right? More than Apple, I was thinking to Google, right. So, is it something that we can imagine that a company like Google in the future will say, for example, our Play Store, and the software to, for example, run applications, into the Play Store and so on, becomes a DAO, right, or it becomes an open organizations so that we can kind of keep these alive instead of, you know, to respond, essentially to the powerful forces that will push for openness and transparency, this kind of enabling platform that is intimidating so much value. And I think the pressures are there for Google to be, for example, more responsible and more transparent towards both the users and the creators on top. So, can we imagine that in the future companies to kind of keep those major enabling platforms alive or create new ones will embrace the DAO path?
Tracheopteryx:
It’s a great example to think about. So, let’s say that, right, Google wants to take this one specific decision, the approval of applications to their store, and they’re going to turn that into a DAO. You could do that. You could certainly do that because that’s a pretty clearly constrained decision. And we’ve got the technology to do that just with token weighted voting. Now, how well would it work? It’s an interesting question. I don’t think we’re going to see a lot of companies do that anytime soon. Or if they do, do it, it’ll be just, well, anytime soon, probably sooner than we think. But right now, maybe, no. It’s more of a marketing thing, I think. And they would do it in a safe way where they make sure that they own controlling interest. And so it’s all kind of decentralized theater.
But one of the problems – and Vitalik Buterin has written about this well – and the problems with coin voting, is that the coin voting mechanism for making decisions in DAOs, it has a lot of problems. Like, you can sell votes. You can decouple the economic and governance power of a token by wrapping it and selling the voting piece, right? And large established financial interests will find a way to manipulate any of these structures. And you’ve seen a lot of governance attacks in DeFi, like, with compound and other places. And that will happen more and more and more, because the coin voting system is kind of fundamentally flawed. But that’s okay.
You know, a lot of people will say, oh, DAOs don’t work. But it’s like, no, that’s fine. That’s part of it. We’ll figure out better systems and we’ll learn how to do this better. But for now, like you wouldn’t see like a giant established player, kind of do this, unless it’s just for marketing. You know, there are some ways to do it, though. The promise or the opportunity there is that you really have better decision making. Google or Apple, whoever has a store, they’re trying to figure — they’re trying to thread the needle on figuring out the best way to like, approve apps that are going to be useful, but they’re constrained by all these different things, like the legal environment that they’re in, etc. But if there’s a better way to make decisions on what gets approved, and what doesn’t, they’ll make more money. And that’s a powerful incentive for these companies. And the opportunity is that DAOs, potentially, are a better way to make those decisions. It’s just not quite there yet.
Simone Cicero:
Right. Well, I captured some, in your words, a couple of points. One is that technologically speaking, and process wise, embracing these techniques could bring efficiency and quality. You know, for example, I’m thinking of what Twitter is doing with Blue Sky project, right? That there could be both a marketing standard or also something very substantial that radically changes the nature of the network. But on the other side, you also recognize that there is this kind of locking of entrenched interests that may prevent, even in front of such a strong signal of potential quality efficiency, and establishing organization to go that path, which I think is a fascinating point to bring up. And maybe we can go back to this lock in elements later on in the conversation. But I know that Stina has some further questions on some practical elements of working in this new context.
Stina Heikkila:
Yeah. Maybe I can bring us back a little bit to the human elements. I know we talked quite a lot on, you know, there are obviously all these new opportunities to make decisions using technologies and the way that the DAO are experimenting with. But you also mentioned the human trust and you also talked about a bit like the team size. You need a certain team size for executing things effectively and there you need to have trust. And I’m curious to hear your thoughts about also mixing this with the fact that the DAO seems also very anonymous, usually working across space very asynchronously, and sort of coordinated from many different locations and so on. And sometimes you don’t even know who you’re collaborating with, from my understanding, you just have an interaction.
So, yeah, it would be nice to hear what you think about this collaboration element between humans and how to build trust in that and combining it with then the new technologies that allow for the decision making. But what is the balance to strike there, basically? And how are you dealing with that?
Tracheopteryx:
Well, my co-founder at Coordinape, Zach Anderson says this thing that I often repeat, which is that “we move at the speed of trust”. And I think it’s very profound and true. And Blockchain doesn’t really change that. But what it does is it adds nuance to it, it adds a layer to it. So, trust is established through relationships, and it’s established in a kind of iterative way. And you build up trust with things. And you can have trust in people and you can have trust in organizations, and you can have trust in tools. And you can have trust in physical properties of the world, like gravity and other things like this. And the thing that really changes everything with this is blockchain because it has such a high trust. We say it’s trustless because the trust is so good, because you know that your bitcoin is not going to get stolen from you on the chain. Like somebody can steal your private key, sure. But when it’s out there, it’s not going to get double spent, it’s not going to get forged. You are in total control of that.
And that type of trust in a financial thing is very powerful. And then when you look at things like DeFi, where you have all these different ways to move financial value, all in this trustless way, it is so powerful, and allows for so much to happen that is — When you don’t trust a system as well, you don’t put as much energy into it, you don’t trust it enough to use it. But with these things, you really can’t trust them. So, there’s that layer, that’s the foundation, that’s the kind of — where the life kind of can enter the system. But then we still have trust between human beings. And that gets more complicated, especially when, as you say, there’s — you go into a DAO today, and you’re in a discord and there’s 5,000 people in there, and you don’t know any of them.
And the coolest part about this is people could be 13 years old, they could be from South Africa, they could be from Sweden, they could be from anywhere. These could be people that have done a lot of self-work and are very open and connected and loving and supportive people. Or they could be people that are totally stuck in patterns and see everybody as the enemy. And all of these people are collaborating together to try and do something. And that’s a huge challenge. Even when you reduce that to a small team, like in my experience, I’ve worked in these smaller teams, like at Yearn Finance and at Coordinape, in particular. And you’ve got people that are from all over the place that have lots of different worldviews, different ages, etc, all that same stuff. But now you’re working everyday together, trying to do something and you’re establishing trust.
And the blockchain, the safety of the assets, and the property does help because it’s a lot easier to verify what’s happening with the money. But then when it comes to things like, oh, you were supposed to write that document for me and you didn’t. Or like, didn’t we have the meeting today, or who’s in charge of making this decision comes up, you can’t reduce all of that stuff to smart contracts. Really, human beings are operating at the edge of this frontier, and we can reduce things to practice after time and create immutable ways to hold them. But there’s always this space of this living space where trust is essential and where interpersonal dynamics are essential. And this is actually why the corporate models work quite well because these are processes that people trust. We’ve all been in corporations, we know what it’s like to have a boss, or not all of us. Some of us haven’t entered the job market, for instance. But many of us haven’t or really seen movies about it.
So, we understand how it works to some extent that we can trust those systems. But these new systems of like, oh, there’s no boss, there’s no — nobody’s telling me what to do. People often have no idea what to do in this case and that makes it harder to develop trust. But that trust piece is the essential piece. That’s what separates a high-functioning team from a totally conflict ridden team that just does bikeshedding all day. And so mostly what I’m interested in is in this area. My basic assumption is that everybody has value, every single person. Everybody has some way to add value to this world. And the challenge is really to create a system, create a culture where people can add their value, and that can be accepted and coalesce into this laser of human output that can help take us into the next phase of human existence. The innovation of blockchain is a key piece for that. Because before that, and we all are familiar with this case where too much power accrues and people become corrupt and they take advantage of it.
And that creates a bad environment with low trust. And then people don’t want to put their gifts into that system, and really put themselves out there. But all of us want to do that, all of us. It’s not just about making money. We all have a force in us to do something in this world. You can look at studies of primates or of children, whatever, we don’t work because of incentives, we work because that is the beauty of life. And that only gets stopped by these corrupt problems and process issues and everything else and wounds, right. So, yeah, I feel like I’m rambling a bit. But there’s this incredibly beautiful opportunity right now to create the minimal structures on top of blockchain that allows for all of these different people from all these different worldviews to come together, and work in harmony. Like, that’s the real opportunity here. I call it the party bike. It’s like a party bike, you know, where 10 people can get on and everybody can pedal as much as or as long as they want and then you get somewhere cool. Like, that’s what we’re building.
Stina Heikkila:
That’s super cool. Like, I remember the first time when I came across the word trustless, and it was such a cognitive dissonance and I said, but I don’t get this trustless. It’s trust, basically, that must be a mistake. And so you explained that really well. So, it’s actually essentially building trust in other things than humans on the side, but then not leaving the human element out. I think it’s very interesting to see that it’s a new way, like you said, it’s a new sort of — we have to have a new imagination of how things are. Because for instance, I can talk from my own perspective, not being a developer, and being more on sort of a social interaction side. If I would enter a discord, or we have had previous podcast guests say “just joined the discord”. But I would — I have no idea what to do if I come into a room with 5,000 people and no videos or no profiles.
And so it’s this big barrier there I feel like because it is so much in the beginning. So, we can sort of get it conceptually. But do you have any examples of something more relatable that has developed as a DAO, if you see what I mean? Like for someone who would be a little bit far from being a developer, or were used to working on these kinds of projects? I don’t know at all, if you have, but it would be interesting to hear the application areas that you’ve seen.
Tracheopteryx:
Yeah, there’s tons. But actually, I want to go back for a second to the word trustless. So, mostly, what trustless means is that you don’t have to trust a third party human. Right? Like, you don’t have to trust a bank to make sure that your money is there. When you put your money in a bank, that bank can decide not to give it to you. Right? So, you have to trust that bank if you want to make financial transactions with Blockchain, they call it trustless because you don’t have to trust in their human. You can just trust — but you are trusting the technology. So, just as you said, you’re like moving trust from one place to another, but trust never goes away.
And to the question of how would you enter a discord, and if you’re not a developer, can you do that? Like, absolutely. Like, all of the DAOs have needs for non-developers in the community. Whether it’s community management, design, communications, partnerships, etc, there’s plenty of things, documentation, that you don’t need to be a developer to do. And there’s many, many DAOs that are working on things that are not straight math. Like my friend’s DAO Thirsty Thirsty, and they’re working on wine and food, and connecting with manufacturers and indigenous peoples that are creating beautiful products and trying to bring that into Web3 to create an ownership economy of these things. And there’s another project doing that with coffee. And so there’s really plenty of really cool things that are less developer centric.
Stina Heikkila:
I’m glad.
Tracheopteryx:
Yeah.
Simone Cicero:
You know, what I feel is that the emergence of these technological layers is helping us to kind of bifurcate the organizational landscape, right? In shared larger scale layers, where the decision making space is very limited. You know, for example, you made the example of Uniswap, where decision are mostly around parameters, right, that you can tweak to changes slightly the business model or the sustainability model, or the protocol and so on, like take rates, for example, and so on. And on the other side of the spectrum, I see that on top of such shared large scale layers, there is much more potential to build small scale organizations where I’m curious to know what you think in terms of what is the real core unit of contribution? Is it the individual or the team?
You also spoke about indigenous teams, for example, and this is something that I’ve been thinking about a lot. So, my assumption — part of my theory of change, if I can say, is that the emergence of this kind of smart contracting capabilities, will drive a lot of sovereignty inside teams. So, once teams become more capable of deciding what work to do, my feeling is that they will do embedded work. So, they will do work that impacts their own places and their own communities. And I’m also curious to know, what is your feeling in terms of looking into this embodied and embedded work? Is it pertaining to place? Is it pertaining to an idea of tribe that can be developed also across places? Because part of the work that I’m sure we have to do as we transition into a new type of economy is to re-embed work inside place, and community? So, what do you feel about it?
Tracheopteryx:
I think there’s at least a couple things in there. We’re going backwards talking about embodiment. So, in my life, most of what I’m interested in is being a flesh and blood human being around other flesh and blood human beings on this planet alive. And very little of that actually gets into the information work of working in a DAO. And that’s a shame. Right now, there’s not much to be done about that other than being present to it, seeing it, and making sure that you do take care of your body, and the other parts of yourself that don’t fit through that narrow straw of the computer screen.
But you can also bring some of that in to this other world. You can transfigure yourself and shape shift into this other space, bringing all of your magic as well. But just, it’s not as fun, really, to just be talking to people in texts all the time. It’s a little different. And it provides challenges all over the place, particularly around conflict and trust building between human beings and understanding each other, right? It’s a lot harder to do in text. Text becomes like a projection fest. It’s much easier to project your old wounds onto a text from somebody you hardly know than it is to do the same thing to another human being in front of you that’s vulnerable. So, that’s a challenge.
Going back to the other part of the team or like, what’s the kind of like, think of it as the kind of atomic unit of this new economy. And I think that’s a very important topic. So, going back 1937, Ronald Coase wrote the nature of the firm. And basically a nice long article about why does it make sense to work as a corporation, as a firm where you have a lot of people versus as a freelancer? Maybe it’d be better for just a bunch of freelancers to work on things, why is it better to work as a company. And he made the argument that because of the efficiencies of scale, basically, all the things we take for granted in the corporate world right now, you’re going to do better in a large group. In that, the fundamentals of that equation have really changed. The friction that used to be there around doing certain types of work is no longer there. And if you look at the environment of Web3, you have a lot of these different features that come together, that really changes that.
You have the trustless nature of the blockchain, you have open source software movement. And these things together, they make it — Like I remember, I was at ETHDenver for a conference recently. I was talking to this different team and it felt like I was talking to a different division of my company, really, because you really realize that we’re all working on the same stuff, we’re all on the same team. It’s all open source. It’s all composable. The big thing that changes with Web3 is that vertical integration is not the same thing. Like, most of the teams that I know, they’re not trying to take over everything, just the economics of that are different now. What they’re trying to do is make their one major contribution or their few contributions and do that as best they can, in a way that’s going to increase the pie. It’s much more positive, some dynamic, much less competitive, much more collaborative. And that’s due to the nature those things like blockchain open source. We’re all working kind of together on the same thing.
What I noticed really changing is team size. You don’t need to really have, and I think this is going to change a lot more, especially a lot of the new DAO stuff that I’m working on, and a lot of other people are too around sub-DAOs. Basically, the unbundling of the DAO, the modularization of it, that I believe that the fundamental unit of the emerging economy is the kind of six person team that’s going to be like the main thing. And these different teams are going to work for various different projects, and they’re going to be compensated in various different ways. And it’s not about collecting IP. Basically nobody cares about IP in Web3 anymore. It’s about creating the best products together and you know, because we have these beautiful new ways to distribute resources and to allocate funds. Like, the blood supply is vastly changed in this new organism.
Simone Cicero:
I mean, that’s super interesting. And I also was reconnecting these to some of your comments. Always in the podcast conversation you had with Jack and Aaron, where you kind of, I don’t want to say criticize it, but kind of spoke critically around this idea of postmodern organizations, right, this idea that inclusion and diversity is going to solve everything. So, there is a nuance that I perceive – a nuance of transcending post-modernity, right? And this is one of the questions that we are discussing, right, in terms of Zeitgeist, in terms of even culture wars, if you will, right. We are seeing these different visions. There is a stronger discussion online on meta modernity as a way to integrate both even tradition, and more embeddedness and place-basedness. So, I see these frictions, right, between seeing ourselves as digitally connected teams that, as you said, focus on the work that you want to do and get successful as a six people unit. And I really buy this. So, I really think that if there is one thing that is going to happen is that organizations are going to be unbundled. Right?
But at the same time, I’m really wondering, how do we re-embed those things into place? And if I think about the affordances of the DAO movement, even in terms of Conway’s Law, or in general, the affordance of the technology, I tend to think that I don’t see this. So, I don’t see these kinds of forces pushing for teams to re-embed into place, re-embed into community, take care of the economy in a way that is much more plural and diverse. And this entails that we question the human development thesis that this DAO movement brings about. So, what is your feeling in terms of how do we transcend and re-integrate this postmodern digital market, everybody can work remotely, digital nomads thing? How do we transcend this into something that is more meaningful? Or how do we regain meaning in organizing thanks to these new enablers that are emerging?
And you spoke about Teal and you spoke about the complexity that people have to embrace, Teal’s collaborative models of organizing remotely, but even Teal itself, and as a movement has been criticized, to not be able to really transcend post-modern thinking. So, what do you think about this? I don’t know, maybe the question is really confusing, but I hope at least you get some of the ones I’m trying to convey.
Tracheopteryx:
I think the first thing is important is that like, let’s embrace and celebrate all of the wisdom that has come from every different developmental term. Right? So, it’s very easy to go and criticize things like post-modernism, or modernism, or previous transitions, but they all brought something and they all bring something now. The logic of the military and the church like that’s valuable to think about process, and strong relationships and hierarchies. Like, that’s useful stuff, let’s not throw that away. Meritocracy that’s useful too. And modernism, and post-modernism pluralism, and like egalitarianism, and listening to everybody and that type of sensitive term, like, that’s critically important too. And there’s more, right, and we can keep developing. And Teal, the integral, like, all of that pieces is critically important as well to be able to see between and across all of these things and beyond into the transpersonal.
The thing I often think about is spiral dynamics, and it certainly comes to mind, but like, we have to meet ourselves where we’re at. Like, just within me, I’m operating at all these different levels of consciousness, I’m not always at this high level of consciousness, and other people are coming from all different places. And again, we all have value. And we need to create structures that are going to be able to meet people where they are. We can create a tool that’s great for Teal people and I’ve done this. And then you have people that really aren’t operating that way, it’s not going to work. It kind of will devolve very quickly and be subject to capture. And then all of a sudden the conversation’s happening at like the lowest common denominator. So, it’s like you can’t ignore that part of ourselves. That part has to be brought in too and it needs different tools.
And when you do see that all these different developmental levels have critical roles and they All need different treatments, it makes sense why it’s hard sometimes to operate in a Thiel way and not fall back to post-modernism. Because maybe we haven’t figured out how to hold the post-modern piece of our culture properly yet. Like, look at the culture wars going on around this stuff right now, like, this is very fraught territory. Like, how do we hear the message of that piece of ourselves properly? I don’t think we’ve figured that out yet.
So, before we try and escape it, which is natural, we want to like, go to the new stuff. I’m enlightened now. Like, forget all that other stuff. Like, no, that other stuff is everything. So, that’s hard. And then coming back to the Earth and to place and to meaning, I think the DAOs will, in all this technology stuff, and all these bits, like they will help there too. It’s like, just take it back to the individual think about oneself. Like my sexual intelligence, my emotions, my heart, each of these has wisdom that I do not want to live on this planet without and each has its own unique way. And then the mind brings in this other incredibly powerful piece so that I as a life form can function in a whole way.
In society, in organization, we can look at the same thing. So, like this digital layer that we’re growing now, that’s going to work in harmony with the land. The DAO, the tech is kind of like the mind and the individual, and it needs to be integrated into the rest of that stack going all the way down to the Earth. And I think as beings are going to navigate this environment in the future, what’s going to look like kind of tying it back to these circles and teams and workgroups is that we have the opportunity to be existing in all of these different circles, we’re going to be in multiple different circles. So, I want to be in an intentional community. My family’s thinking about moving to one so that we can spend more time in the Earth and more time in the physical community. But a lot of the problems with that type of stuff like the qubits movement, and socialist communities, and communism, all this stuff is like, one of the things is it lacked some of the decision making apparatus and the financial components the fire wasn’t quite there and tended to in the right way. But that’s exactly what we’re learning how to do in DAOs.
So, like, we can weave that in, and then maybe create better place based communities that are able to do cognition that previous ones haven’t been able to do. This will be part of those, but then will be part of these disembodied ones to like our science fiction, fan clubs and our quantum physics research facilities, right. They’re going to take place in the Ether. And that’s all right. It’s not like everything needs to be connected to the Earth directly. Like, there’s space for these etheric things as well. And those are beautiful too. Don’t try and reduce those to like farming. But as beings, if we want to be integrated, I think it’s important to have all of those parts of ourselves alive.
Simone Cicero:
I mean, that’s really, really important. I think running these podcasts and other projects looking into these questions, we always will often come to this point that there is some integration to do, right? Our friend Indy Johar uses this word, diagonal, right? We have to build this transformation in a diagonal way. So, be able to work both at the global, digitalized, these kind of new technological enablers level, but also the personnel and an embedded layer. So, if there is a challenge that I think DAO practitioners and innovators, in general, I think we have to entertain these challenges, this “Kōan” as somebody was, would say, right? So, this problematic situation, this trouble. We have to stay in this trouble. So, we don’t have to just embrace this techno optimistic vision that sometimes gets embedded into these narratives.
But at the same time, my feeling is that these new technologies are bringing about powerful ways for us to at least address and solve some of the lock-ins that, for example, financial precarity, right? Lots of people have been lifted out of precarity with DAOs, and I think that’s amazing. And people have been now able to think about how to reorient their capabilities, their will into regeneration, for example, or embeddedness. People have been able to ask questions, basically that in a precarious ultra market driven world that we haven’t been able to do so. Because bureaucracies have been very strong and been dominating production and markets for ages now, right, and have been demonstrating resistance to change. And I feel that these technological enablers are kind of subverting this for the first time. And so maybe they are just giving us an opportunity to think, an opportunity to reprioritize and decide what is salient for us as teams and humans more in general. So, I’m hopeful, let’s say.
Tracheopteryx:
Yeah, me too.
Stina Heikkila:
And I think it’s interesting that the more we speak now on Web3 and DAOs and so on, my feeling is that it’s definitely not neutral, that people have a very strong value driven vision behind those projects and really wanting to contribute to something better, and then in different ways, but it’s really nice to see that it’s bad agents for now seems to be kept in check. And hopefully, these technologies that you have described help exactly to do that. So, that can bring us some hopefulness in this in face of all the challenges that we have to solve globally.
But maybe to wrap up if you want to point us, Trach, to where do our listeners follow you. And if you want to mention a few things that maybe are coming up that you’re excited about, and that you really want people to have on their radars, that would be a good way to close the conversation.
Tracheopteryx:
Great. Well, thank you so much for having me. The best place to follow me is on Twitter. And I’m not going to spell my name because it’s too long and confusing and I totally chose a hard to spell and say name. But hopefully you can put that in the show notes. And yeah, it’s Tracheopteryx on Twitter. I’m planning to kind of take the summer a little slower and spend some time with my family, and in more deep work thinking a little bit more, drifting, dreaming a little bit more. So, there’s not a lot of events. Well, I will be going to some events, but there’s nothing in particular I’d point you to.
Simone Cicero:
I mean, that’s at least suggestions for our listeners to slow down a little bit as well, right, and give themselves time to think and reflect.
Tracheopteryx:
Yes.
Simone Cicero:
So, I mean, in general, it was an amazing conversation. And we started from technicalities, and we ended up with really important things and important questions and I love that. For sure, We’re going to release them to these podcasts a few times trying to extend our thinking even more. So, thank you so much for being with us. Thank you so much.
Tracheopteryx:
Thank you.
Simone Cicero:
And Stina, thank you for co-hosting. And I mean to our listeners, as always, catch up soon.